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As GOP pounces, UTC deal draws widely different reactions

The day after UTC’s merger with Raytheon was announced, Gov. Ned Lamont was quiet. UTC said it would move its headquarters to Massachusetts.

Photo: JIM WATSON / AFP /Getty Images

A day after United Technologies announced it was moving its headquarters out of Connecticut as part of a merger with defense-giant Raytheon, Gov. Ned Lamont’s top economic official put the news in the best light possible, following Lamont’s statement Sunday that noted most UTC jobs will remain in the state.

But the announcement and impending departure further exacerbates a deep political divide in the state that has unfolded in years of anemic growth.

Republicans were quick to pounce on the likely 2020 exit of the UTC headquarters from Farmington to Boston as another black eye for Connecticut. They called it a reflection of failed anti-business Democratic policies relying on taxing and spending.

Democrats maintain that while the loss of the state’s most prominent corporate headquarters is bad, the world isn’t ending for the state.

“You would clearly rather have the headquarters than not have the headquarters,” said David Lehman, commissioner of the state Department of Economic and Community Development. “But the big subsidiaries that have been in Connecticut are all going to be in Connecticut.”

Some Republicans saw that sort of talk as whitewashing.

“Corporate business owners and headquarters are going to make long-term decisions, so whether they started this decision six months ago, after the election, or a year ago, bottom line is they want to see long-term sustainability for the state of Connecticut and for the last 10 years Democrats haven’t demonstrated that long-term stability,” said Rep. Vin Candelora, R-North Branford. “The fact that we just extended out the pension debt even further, eventually that price-tag is going to come up to be paid, so these businesses recognize that fact and are making decisions based on it.”

One Republican quipped to a journalist that he would bet a beer that Pratt & Whitney would be gone from Connecticut to Florida, where the UTC-owned jet engine-maker has major operations, and that Otis Elevator will move its headquarters elsewhere after a scheduled spinoff next year.

Lamont spoke with Greg Hayes, chief executive of Farmington-based UTC, Sunday after news of the merger broke a day earlier. A spokesman for Lamont said the governor has consistently been in touch with the state’s largest private employer since taking office.

“Our economic development team, led by Jim Smith, Indra Nooyi, and David Lehman, is already aggressively shifting their business development strategy,” Lamont said in the statement issued Sunday. “We will continue to market our state as a fantastic place to live, work, and locate a business.”

Smith, co-chair of the Connecticut Economic Resource Center, a nonprofit corporation that has teamed up with the state’s Department of Economic and Community Development to improve the business climate, referred a request for comment to the governor’s team.

Lehman, speaking for the administration, said a stronger combined UTC-Raytheon could be good for Connecticut even without the headquarters here. “There will be net new jobs in the subsidiaries in Connecticut as they continue to grow,” he said, adding, “It is not clear to me we’re supposed to think of this as a zero-sum game between Massachusetts and Connecticut.”

The governor’ office got word from UTC late Friday that company officials wanted to talk with Lamont and others in the administration on Sunday or Monday. Lamont talked to Hayes and Lehman, head of the state Department of Economic and Community Development, talked with other UTC officials. Lehman said he and Lamont were not alarmed by the request, Lehman said.

“We didn’t know what that conversation was,” he said, adding that he’s had regular conversations with United Technologies.

Late Saturday, before those conversations could happen, the Wall Street Journal reported the imminent merger announcement and CNBC reported that the headquarters would be in the Boston area.

Lehman said he and Lamont were not taken aback by the company’s failure to tell them well enough in advance that they could react. That would be impossible, as, under federal securities law, only the people who must know about a deal are informed of it. As it happened, Lamont did have a conversation with Hayes, right around the time UTC announced the deal.

Whether Lamont would have been told in advance had the companies waited until Monday to make the announcement may never be known. But Lehman said he’s optimistic about UTC’s future in Connecticut.

“It’s incumbent on us to continue the forward momentum that the aerospace industry has,” Lehman said. “I’m confident that they are going to grow their presence in the state. There is a tailwind.”

Fighting the narrative that Connecticut drives business out, Senate Majority Leader Bob Duff, D-Norwalk, listed companies that have moved to Connecticut since 2000 includingCigna, Charter Communications, NBC Sports, Infosys, HomeServe USA and Ideanomics and Sen. Cathy Osten, D-Sprague, noted that Connecticut will continue to support a manufacturing training pipeline through the state budget.

“Connecticut’s history on manufacturing is long,” she said. “It’s honorable.”

But U.S. Sen. Richard Blumenthal said themerger “raises sweeping and serious questions and doubts about its impact on the Connecticut workforce and economy, as well as our national security and defense,” and promised aggressive scrutiny by Congress, the Pentagon, the Department of Justice and other executive branch agencies.”

“I will demand answers immediately and publicly,” he said. “As a member of the Senate Armed Services Committee, I am troubled by the possible impact on cost and competition of defense product, which may significantly affect American taxpayers ... Of paramount interest to me is that the company match increasing defense and commercial contract commitments with additional jobs in Connecticut. I will be fighting to protect Connecticut jobs and workers every step of the way.”